A good news for the people who invest in mutual funds. Now the taxmen might be a little liberal on your hard earned money from mutual funds.

The FM is is considering a proposal to exempt “fund of funds” (FoF) mutual funds from long-term capital gains in the forthcoming Budget. Funds of Funds are the funds which essentially are invested in different types of schemes and allow retail and corporate investors to diversify their risk portfolio. At present these funds are liable to long-term capital gains and dividend distribution tax, unlike equity mutual funds. The reason is that these funds — from the likes of Kotak Mutual Fund, Fidelity and Reliance Capital among others — do not directly invest in the equity market.

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